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Media General And LIN Media To Combine And Create The Second Largest Pure-Play Television Broadcasting Company

Media General, Inc. (NYSE:MEG) and LIN Media LLC (NYSE:LIN) today announced a definitive merger agreement that will create the second largest pure-play television broadcasting company in the U.S. Under the terms of the agreement, and based on Media General’s trailing 20-day volume weighted average price on March 19, 2014, the shareholders of LIN Media will receive aggregate consideration valued at $1.6 billion in a combination of stock and cash, or approximately $27.82 per share if prorated ratably, which represents a 28% premium to LIN Media’s trailing 20-day volume weighted average price on March 19, 2014. Based on LIN Media’s pro forma net debt balance of $968 million at December 31, 2013, the transaction enterprise value is approximately $2.6 billion.

As contemplated by the transaction, Media General has formed a new holding company, which after closing will be named Media General. Media General shareholders will receive one share of the new holding company for each share of Media General that they own upon closing. LIN Media shareholders will receive for each LIN share, at their election, $27.82 in cash or 1.5762 shares of the new holding company, subject to proration. The aggregate cash amount available for LIN Media shareholders electing cash is $763 million. Upon the closing of the transaction, LIN Media shareholders will own approximately 36% of the fully-diluted shares of the new holding company.

Together, Media General and LIN Media will own and operate or service 74 stations across 46 markets, reaching approximately 26.5 million households, or 23%, of U.S. TV households. The companies’ current TV portfolio includes 33 Big Four network-affiliated TV stations located in the Top 75 DMAs, 39 Big Four network-affiliated TV stations ranked #1 or #2 in their respective markets and the second-largest CBS affiliate group in the U.S., as measured by revenue. Media General expects certain of these stations to be swapped or otherwise divested in order to address regulatory considerations. In addition to the websites associated with each TV station, Media General’s digital media portfolio will include LIN Digital, LIN Mobile, Dedicated Media, HYFN, Nami Media and Federated Media. This portfolio is poised to grow rapidly.

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